Jump Crypto Files Documents Confidentially in Terraform Labs Lawsuit
A federal judge has accepted confidential materials from Jump Crypto Holdings in discovery as part of the Securities and Exchange Commission’s lawsuit against Terraform Labs.
In a Nov. 28 filing in the U.S. District Court for the Southern District of New York, Judge Jed Rakoff sanctioned the confidential treatment of specific materials generated by Jump Crypto Holdings, the cryptocurrency division of Jump Trading.
“The Court retains discretion to make public any confidential materials in connection with future motion practice or trial,” the filing read. “If such disclosure is contemplated, the Court will provide prior notice to counsel for Jump so that counsel may be heard on any objections.”
Jump Trading had reportedly come under investigation by the SEC for its purported role in the events that triggered the depegging of TerraUSD (UST) and the subsequent decline of the Terra ecosystem, a major catalyst for the crypto market downturn of 2022.
Prior to the collapse of Terraform Labs, Jump Crypto had a notable role in the company’s ecosystem, engaging in funding rounds with the goal of creating a reserve for Terra’s stablecoin, UST.
However, in May, investors filed a lawsuit against Jump Trading, accusing the firm and its CEO, Kanav Kariya, of manipulating the price of UST to secure approximately $1.3 billion in profits.
According to the SEC, Terraform Labs loaned Jump 30 million Terra tokens in November 2019 and an additional 65 million LUNA in September 2020.
Terra claimed that the “loans” were intended to enhance liquidity; however, the SEC asserted that the trading firm was consistently selling LUNA into the market.
In February this year, the SEC filed charges against Terraform Labs and its co-founder Do Kwon, alleging
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